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Unformatted text preview: Assuming this debt is held in perpetuity, what would be the total value of the tax shield to Haverhill if it goes through with the debt issuance? 2. Why does the debt overhang problem make it difficult for firms facing financial distress to finance projects with new equity? 3. Do Higgins Chapter 6, #5. 4. Do Higgins, Chapter 6, #14. Do only parts a, b, c, f, g. (Studying past annual reports, as suggested in the problem, might be useful for part f, if you want to assess the volatility of Avons cash flow.) 5. Do Higgins, Chapter 6, #16, but do the calculations for fiscal year end 2008 . Do Net Income/Interest Expense, Total Liabilities/Total Assets, and Long-term Debt/Equity. You do not need to use the Market Insight website. You can calculate the information from financial sites such as Yahoo. 2...
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- Winter '10